The midbrain dopamine system is critical for learning, motivation and processing rewards. Malfunctions of this system are associated with a variety of pathological conditions including depression, schizophrenia and addiction. Dopamine neurons, located in the ventral tegmental area (VTA) and substantia nigra pars compacta (SNc), are thought to broadcast reward prediction error (RPE) signals, i.e., the discrepancy between actual reward and expected reward. Furthermore, recent studies have indicated that dopamine neurons in the VTA and SNc convey different signals, value and saliency, respectively. While these observations have generated great interest, how dopamine neurons compute error signals is unknown. This project will address the following two main questions: (1) How do dopamine neurons compute RPE signals? and (2) What underlies the different response properties of VTA and SNc dopamine neurons? Although local GABAergic neurons in VTA and SN exert a powerful influence on dopamine neurons, little is known about their firing patterns in a behavioral context. Specific Aim 1 will test the hypothesis that these GABAergic neurons encode reward expectation, which contributes to the prediction error calculations of dopamine neurons. To test this hypothesis, the spiking activity from VTA will be recorded while mice perform a classical conditioning paradigm in which they associate different odors with different outcomes (big water, small water, nothing and airpuff). To identify neurotransmitter types of recorded neurons, dopaminergic or GABAergic neurons will be tagged with channelrhodopsin (ChR2) and whether recorded neurons respond to light will be examined. First, whether identified dopamine neurons indeed convey RPE signals will be examined. Second, whether VTA GABAergic neurons show sustained activation reflecting upcoming reward value during the delay between a reward- predicting odor and the delivery of reward will be tested. Specific Aim 2 will test whether the reward responses of dopamine neurons under various conditions can be accounted for by the response profiles of VTA GABAergic neurons. The activity of dopaminergic and GABAergic neurons in VTA will be recorded while mice associate new odors with reward, or in a task in which the timing of reward was manipulated. Specific Aim 3 will test the hypothesis that the activity of local GABAergic neurons can explain the different response properties of dopamine neurons in the VTA and substantia nigra (SN). Specifically, the hypothesis that SN GABAergic neurons signal the prediction of aversive as well as rewarding events will be tested. In total, the results obtained in the proposed project will elucidate the key players contributing o RPE calculations of dopamine neurons. Understanding the detailed neural circuit mechanisms for RPE computation will facilitate our ability to understand etiology of depression, schizophrenia and addiction, and to design preventive and therapeutic approaches for these disorders. PUBLIC HEALTH RELEVANCE: Malfunction of the midbrain dopamine system is associated with a variety of pathological conditions including depression, schizophrenia and addiction. Understanding neural circuits that regulate dopamine neurons will deepen our understanding of the etiology of these diseases and aid in the design of preventive and therapeutic approaches.